Agencies get down to business

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Agencies apparently got the message on business case planning. Last spring, the Office of Management and Budget handed back the business case studies for more than 750 projects, giving agencies until Oct. 1 to fix their management plans or risk losing funding.

The budget ultimatum forced agencies to re-examine how they approach a project's management, which experts hope will translate into fewer troubled projects.

For most of the at-risk projects criticized for having poor plans, agency officials came back with improved businesses cases, OMB officials said. In other cases, agencies consolidated plans for multiple projects, which made it easier to show a return on investment. An unspecified number of projects were delayed until fiscal 2005.

"Many, if not a large majority, resubmitted business cases and are moving forward," said one senior OMB official. "By and large, the management attention in this process led the agencies to improve their business cases."

Weaknesses in some business cases were corrected through the process of consolidating plans for office automation, infrastructure and telecommunications. OMB's guidance for the fiscal 2005 process required agencies to review projects that could be merged under that category, pushing agencies to take an enterprisewide view of the infrastructure.

"There were a number of problems because agencies didn't properly assess their infrastructures," the official said.

Still, several dozen other projects were held until fiscal 2005 after agencies and OMB officials agreed they had insufficient business cases, the official said.

"What OMB could say is, 'You need to do a great deal of homework on this business case and enter it into the next budget cycle,' " said William McVay, who led OMB's business case oversight for two years before joining DigitalNet Government Solutions as vice president of e-government solutions.

Once a project is placed on the at-risk list, agencies begin a monthly process of submitting updated information to budget officials to close the performance gaps, McVay said. Some projects are mission-critical applications that must be in place but that need greater planning attention, he said.

Business cases must meet tough requirements for cost, security and schedule and performance goals. The fiscal 2004 budget was the first to include the new business case process.

The problem wasn't that plans were poorly written, officials said, but that projects lack the underlying management.

The business case process shifted how agencies handle project management. In the past two or three years, agencies have begun to treat their IT spending as a strategic investment, OMB officials said, improving the way they develop their spending plans.

"It's probably hard on agencies, and it's hard here at [the Environmental Protection Agency] because the rules change every year and the bar gets higher every year," said Kim Nelson, chief information officer at the EPA. "We've invested a tremendous amount of time and attention and resources to make sure the foot we're putting forward is the best one for the agency."

Although fiscal 2005 results remain to be seen, many expect the trend to continue.

"I think what you'll hear OMB saying over and over and over, and loudly in the most recent past, is that business cases are not about writing science fiction," McVay said. "They are about improving the IT management in a way that shows up in these well-planned business cases."

Training has been a key to improving project management plans. Managers are looking at IT projects like any other portfolio, he said, examining return on investment, costs and benefits, acquisition strategy and architecture.

In addition to training, agencies should be hiring experienced proj- ect managers or even rotating project managers who have tackled large- scale IT project successfully to new projects, said Bruce McConnell, president of McConnell International LLC and chief of information policy and technology at OMB during the Clinton administration.

Much of the management plan improvement will take time, however, he said. OMB is raising the standards for managers and, this year, requiring a closer connection to the federal enterprise architecture. Increased expectations, coupled with ongoing skills gaps, mean it's going to take time to produce good business cases, he said.

Despite the progress in the fiscal 2004 process, McConnell was skeptical that next year would show a major difference. "I expect there will be a significant number and dollar volume of cases that are still in this borderline area," he said.

For Chip Mather, senior vice president of Acquisition Solutions Inc., the question isn't how long. The idea that OMB and agencies actually held some projects for the next budget cycle means the administration is serious about IT management.

"The fact that this doesn't happen overnight isn't a reason not to do it," he said. "It's going to take time, but it's worth doing. I don't see this going away."

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Three fates of business cases

The Office of Management and Budget returned more than 750 business cases that agencies submitted as part of fiscal 2004 budget planning, giving them until Oct. 1, 2003, to try again.

Sources say most agencies took one of three routes with a rejected business case:

1. Refined the business case to reflect stronger management processes.

2. Combined submissions for related projects to provide a more compelling business case.

3. Postponed a budget request for at least a year, if not indefinitely.